Finance Committee on Nov. 27th, 2013

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Chair.

We do not support the proposed changes.

I want to remind my colleagues in the NDP and Liberal Party that in fact, this legislation is going to ensure that EI premium rates will be no higher than $1.88 in 2015 and 2016. It does not preclude the government from further lowering the rate in the future depending on the evolution of economic conditions.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Saxton.

Mr. Caron, you have the floor.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I would like to remind Mr. Saxton that the government raised the premium rate to $1.88 because it ignored the surplus of $57 billion that was there at the time. We have asked the officials who are here with us a number of questions about where the $57 billion reserve is. It turns out that the surplus has actually been fully incorporated into the government’s general revenue fund. That means that, when the government set up the premium rate, it ignored the $57 billion.

So I would like Mr. Saxton to consider the fact that the government made the decision to reform employment insurance, to increase the premiums and to reduce access to the program by ignoring the existence of the $57 billion that came from the premiums paid by employers and employees. Remember that the government has not contributed to the program for over 20 years.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Chair, I just want to add as well, that by freezing the rate, it will provide certainty and predictability to employers and employees over the next few years, which we think is very important.

In 2017 the rate will be set on a seven-year, break-even basis.

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

We will then vote on Liberal amendment 2.

(Amendment negatived [See Minutes of Proceedings])

(Clauses 126 to 129 inclusive agreed to on division)

(Clause 130 agreed to)

(On clause 131)

We'll go to clause 131, where we have amendment NDP-6.

Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

What we are proposing with this amendment deals with rate changes. The minister under Bill C-4 would have the power to substitute in any year whatever rate he wanted for any reason he deemed to be in the public interest.

We think there should be some accountability that goes with that power. We're concerned that it opens the door to continuing politicization of premium rates and potential future abuse of the system to create surpluses to be used for non-EI purposes, which is the situation I just described with the $57 billion that Conservatives and Liberals used for balancing budgets and giving corporate tax cuts.

Our proposed amendment NDP-6 would require the minister to report to Parliament on the reasons for substituting a rate. If the minister wants to change the rate, he should have to, at a minimum, tell Canadians why he wants to change the rate, and what the impacts of the substituted rate would be compared with what was recommended by the EI commission. We believe this would bring much greater transparency, and with the EI funds that's greatly needed, given that it is moneys that come in from workers and employers across the country, and given the shocking history of abuse of the EI funds by successive governments.

We feel that if the minister is going to have these increased powers, which basically override the EI commission, which he has been disregarding anyway, that he should have to justify a substituted rate that he's recommending and say why this will have a positive impact versus the rate that the EI commission is recommending.

We think that greater transparency and accountability are what Canadians are looking for. I would urge my colleagues, especially in the Conservative Party, to vote in favour of accountability and transparency.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

Chair, we cannot support the proposed changes, because changes to the EI rate-setting process that will come into effect in 2016 will ensure transparency and accountability in the rate-setting process. In addition, the legislative requirement to break even over time will ensure that any surplus EI premiums are ultimately only used to pay for EI benefits.

[The Chair, Conservative, James Rajotte]

Thank you.

Do you have anything further to add, Ms. Nash?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Yes. I just have to add, Mr. Saxton, how can concentrating power in the exclusive hands of the minister without public accountability lead to greater transparency? It doesn't make sense. What we have is an EI commission, and there is an accountability measure through the EI commission, but what this does is it turns the power over to the minister to impose whatever rate he wants on EI premiums without public accountability.

All we're proposing with this amendment, and we think it ought to be pretty basic and easy to support, is if the minister is going to override the EI commission and substitute a rate, then for goodness' sake, let's just have him come to Parliament, say why he wants to do that, and what the impact would be. It's pretty basic.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Saxton, please.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thanks, Chair.

I just want to remind Ms. Nash that both the EI commission and the actuary for the EI operating account will prepare EI premium rate reports, and these reports will be made public when the rate for the following year is announced in September, and tabled soon after by the Minister of Employment and Social Development.

[The Chair, Conservative, James Rajotte]

Does that satisfy you, Ms. Nash?

[Peggy Nash, NDP, Parkdale—High Park, ON]

What you're saying, then, is that the EI commission can come in and recommend a rate based on their study, their observations, and their predictions, and the minister can come in and impose a different rate. After the fact, the EI commission can publish a report on that and say what the impact was, but the rate will already have been adopted.

All we're asking is if the minister believes it is in the best interests of Canadians to make a change to the EI rate, that he at least, for goodness' sake, tell Canadians why he thinks that change is beneficial and why he wants to override the experts on the EI commission. He should have to say what the impact of that rate change would be. I think that's pretty fundamental.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

I will then call the vote on amendment NDP-6.

(Amendment negatived [See Minutes of Proceedings])

(Clause 131 agreed to on division)

Colleagues, I do not have an amendment until clause 176.

[Peggy Nash, NDP, Parkdale—High Park, ON]

You can group clauses 132 to 134.

[Scott Brison, Liberal, Kings—Hants, NS]

I would like to have them voted on separately.

(Clauses 132 to 134 inclusive agreed to on division sequentially)

(On clause 135)

[The Chair, Conservative, James Rajotte]

Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I just want to make a point on clause 135. We are going to vote in favour of this.

We support the extension of the small business hiring credit, but we have heard concerns that it is funded through the EI account, which the Conservatives have already pretty much depleted. We think it ought to be funded through general revenues. We've also proposed additional job creation measures, like a youth job creation grant, but we will support this clause.

(Clause 135 agreed to)

[The Chair, Conservative, James Rajotte]

May I group clauses 136 to 175?

[Peggy Nash, NDP, Parkdale—High Park, ON]

No.

[The Chair, Conservative, James Rajotte]

Shall clause 136 carry?

(Clause 136 agreed to on division)

(On clause 137)

Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I would like to talk about one of the basic problems with the way the government is managing EI, including the reform that the government has been implementing for a while and even the measures in place before the reform. In fact, in an interview I gave in my riding, I was asked an interesting question. The reporter had talked to a number of former MPs from all the political parties, Liberal, Conservative and New Democratic, and he asked everyone the same questions. He wanted to know why the management of EI was a recurring problem and why people were never happy. I answered right away. The main reason is that the government consults with employers and employees as little as possible and it independently manages a program to which it makes no contribution. The government invests nothing in the EI fund. The funding comes from premiums.

Clearly, when an entity like the Government of Canada manages a program of the size and complexity of Canada’s employment insurance without consulting those directly affected by the program, people will be very unhappy. At least, the Canada Employment Insurance Financing Board was a bit more independent than the government in setting the premium rates. However, not long after the government created the board, it abolished it, despite the fact that the previous budget bill confirmed that the board would just be suspended. The government changed its tune, and now the organization is abolished. From now on, the government is and will be in full control of setting the premiums that, let us not forget, are paid by employers and employees.

I am sure that people across Canada, particularly the workers who want to be heard on the issue, will be extremely disappointed by the government’s attitude. It will not help rebuild the confidence of workers, the unemployed and those who receive benefits because they lost their jobs. Nor will it help rebuild the confidence of employers who, despite the government’s fine promises, will still have to do what the government wants in terms of setting benefits, but with minimal consultation.

We strongly deplore the government’s decision, which once again confirms one thing. As my colleague said, even though it was the Liberal government that helped itself to the $57 billion from the EI fund, it was the Conservative government that made sure that fund was completely closed, actuarially speaking. It was the Conservative government that created another fund with the level of premiums and revenue set at zero, as if the previous $57 billion did not exist. It was the Conservative government that took over the management completely.

The government did not do what it did just with the Canada Employment Insurance Financing Board. It did the same thing by abolishing the boards of referees and replacing them with the Social Security Tribunal. Government employees or representatives cannot be aware of everything. Those boards had the advantage of being regional. They were dealing with appeals from claimants whose benefits were denied, but on a regional basis. The boards understood the regional reality. However, the government has centralized that whole process and taken all the power by appointing a number of former Conservative members or supporters to the commission. That process is anything but impartial.

Once again, that clearly shows the Conservative government’s failure to understand, or even its contempt for, the reality of workers and of the unemployed in all regions of Canada.